Redford is also set to produce the film. Scott Neustadter and Michael H Weber, the writers behind such films as "500 Days of Summer", "The Fault in Our Stars" and "Paper Towns", are already writing the script, reported Deadline.
The upcoming film is an adaptation of the novel by Haruf, published in May of this year.
The novel centres on two elderly friends, who live close to one another in a Colorado town, looking back on their lives and also considering what the rest of their lives will be like.
77-year-old Fonda and 79-year-old Redford have previously worked together but they have not shared a screen for more than four decades.
The pair starred together in "Barefoot in the Park" (1967) and in "The Electric Horseman" (1979).
Fonda has previously worked with Netflix on "Grace and Frankie", the comedy drama in which she stars opposite Lily Tomlin. The series, which premiered earlier this year, has been renewed for a second season which will also be available on Netflix.